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Iraq's Oil For Food Program's Impending End, Leaves Some Nervous

The biggest U.N.-run food aid program in history is set to end in November, leaving most Iraqis who benefit from the assistance nervous about the future. But the Coalition Provisional Authority in Iraq is trying to assure people that help will continue for some time to come.

Baghdad shopkeeper Shaheed Karim runs a tiny market tucked away in the city's Mansour district. The shop's simple wooden shelves are stocked with a few bottles of shampoo, tubes of toothpaste, and Coca-Cola.

But he says it is the monthly distribution of U.N. rations, like beans, that bring in the majority of his customers.

Mr. Karim says the beans, flour, vegetable oil, sugar, tea and soap have a big impact on the daily lives of most Iraqis. He says they rely heavily on it to provide for their basic needs. Mr. Karim is one of 44,000 voluntary distribution agents across Iraq who ensure the rations get out to the people who need them.

Customer Riyadh Abu Ali stops by the shop to pick up his ration, but he says even that is not sufficient.

"It is not enough for a big family," he said. "We are seven persons, so it is not enough."

Shopkeeper Shaheed Karim says some families even sell part of their ration to buy vegetables to supplement their diets, or to purchase medicine or other necessities they cannot otherwise afford. He says people must pay for the U.N. food, about 50 cents per person every month. Mr. Karim says some families find it difficult to pay even that.

The program is called Oil for Food. It was established in 1995, and allowed Iraq to sell oil, provided the money went into a U.N. fund to pay for food for the Iraqi people.

At the time, U.N. sanctions prevented Iraq from selling its oil on the open market. According to the United Nations, about 3.5 billion barrels of Iraqi oil, valued at about $65 billion, were exported under the program. Most of the proceeds were allocated for humanitarian needs.

The U.N. World Food Program has been responsible for bringing the food aid into Iraq. World Food Program spokeswoman Antonia Paradela says about 16 million of Iraq's 27 million people have been totally reliant on the Oil for Food Program.

Ms. Paradela says the streets of the Iraqi capital, Baghdad, present the image of a prosperous country, but the reality is that one in five Iraqis live in chronic poverty.

"Driving through the streets of Baghdad, we see markets, we see food, we see restaurants," she said. "But it is easy to be misled by this impression. In reality, more than half of the Iraqi population is poor. At least, they are unable to meet their basic needs. Also, in a recent study we are carrying out right now on poverty levels in Iraq after the war, we found that three out of four Iraqis will have difficulties putting food on their table, if the ration system will disappear."

Iraq's economy has been hit hard by 12 years of crippling economic sanctions, and the former regime's corruption and military adventurism. Unemployment runs at a staggering 60 percent, with many former state employees now out of work.

But the Security Council has lifted the sanctions on Iraq, and the Oil for Food program is being phased out in November.

The move has some of Mr. Karim's customers nervous.

He says the food aid is organizing people's lives. He says if the program is canceled, it will be a disaster for the Iraqis.

But the Coalition Provisional Authority has recently announced that although the Oil for Food Program will end, the food distribution will continue.

"We understand that a great number of Iraqi families depend on the ration cards for their monthly food, at least for most of their monthly food," explains Paul Bremer, head of the Coalition Provisional Authority. "We have committed to continuing that program. We are, of course, examining what the most rational use is in the future. We will continue this program, until such time we and the Governing Council reach agreement on what changes there might be made in it."

According to chief Coalition spokesman Charles Heatley, any program changes will be contingent on just how quickly Iraq's moribund economy picks up pace.

"Clearly as this economy slowly transforms from a very centralized, very mismanaged planned economy to a more market-run economy, then there will be a time when it is no longer really appropriate to have a centralized government-run food distribution program," he said. "But we will not be making changes in the months ahead. And indeed, the changes that we make we will make very carefully and in a very planned way to make sure it does not impact on the Iraqi people who have already suffered enough."

Mr. Heatley says the new Iraqi Ministry of Trade will be taking the lead in ensuring that the country's oil revenues continue to be used to provide food for the millions who need it. He says the ministry will continue to work with the World Food Program, and that much food is already in storage in Iraq.

Mr. Heatley says the food distribution system will continue to provide a social safety net to protect Iraq's impoverished majority.